Appendix] Trial balance workpapers and financial statements in year of acquisition Peg Corporation owns 90 percent of the voting stock of Sup Corporation and 25 percent of the voting stock of Ell Corporation. The 90 percent interest in Sup was acquired for $18,000 cash on January 1, 2011, when Sup's stockholders' equity was $20,000 (S18,000 capital stock and $2,000 retained earnings). Peg's 25 percent interest in Ell was purchased for $7,000 cash on July 1, 2011, when Ell's stockholders' equity was $24,000 ($15,000 capital stock, $6,000 retained earnings, and $3,000 The difference between fair value and book value is due to unrecorded patents and is amortized December 31, 20, are as currenl earnings-first half of 2010). over 10 years follows: Adjusted trial balances of the three associated companies at Peg Sup ELI 18950 $4,000 Other current assets Plant assets-ct Investment in Sup-90 percent 19,800 6.450 60009.000 60,000 16000 25,000 10.0007,05,00 00,200 $15,000 000 Other expenses Dividends (paid in November) 9,000 5,000 3,000 Total Debits Current liabilities Capitai stock Retained carnings Sales Income from Sup Income from Ell 25,000 7,000 9,000 18,000 5,000 28,000 30,000 5300,200 $60.000 Total credits REQUIRED 1. Reconstruct the journal entries that were made by Peg Corporation during 2011 to account for its invest- ments in Sup and Ell Corporatioos. 2. Prepare an income statement, a retained eamings statement, and a balance sheet for Peg Corporation for December 31,2011. 3. Prepare consolidation workpapers (trial balance format) for Peg and Subsidiaries for 2011. 4. Prepare consolidated financial statements other than the cash flows statement for Peg Corporation and Subsidiaries for the year ended December 31, 201. Appendix] Trial balance workpapers and financial statements in year of acquisition Peg Corporation owns 90 percent of the voting stock of Sup Corporation and 25 percent of the voting stock of Ell Corporation. The 90 percent interest in Sup was acquired for $18,000 cash on January 1, 2011, when Sup's stockholders' equity was $20,000 (S18,000 capital stock and $2,000 retained earnings). Peg's 25 percent interest in Ell was purchased for $7,000 cash on July 1, 2011, when Ell's stockholders' equity was $24,000 ($15,000 capital stock, $6,000 retained earnings, and $3,000 The difference between fair value and book value is due to unrecorded patents and is amortized December 31, 20, are as currenl earnings-first half of 2010). over 10 years follows: Adjusted trial balances of the three associated companies at Peg Sup ELI 18950 $4,000 Other current assets Plant assets-ct Investment in Sup-90 percent 19,800 6.450 60009.000 60,000 16000 25,000 10.0007,05,00 00,200 $15,000 000 Other expenses Dividends (paid in November) 9,000 5,000 3,000 Total Debits Current liabilities Capitai stock Retained carnings Sales Income from Sup Income from Ell 25,000 7,000 9,000 18,000 5,000 28,000 30,000 5300,200 $60.000 Total credits REQUIRED 1. Reconstruct the journal entries that were made by Peg Corporation during 2011 to account for its invest- ments in Sup and Ell Corporatioos. 2. Prepare an income statement, a retained eamings statement, and a balance sheet for Peg Corporation for December 31,2011. 3. Prepare consolidation workpapers (trial balance format) for Peg and Subsidiaries for 2011. 4. Prepare consolidated financial statements other than the cash flows statement for Peg Corporation and Subsidiaries for the year ended December 31, 201